OPINION - “Taxes are too high and the money that the government does collect is spent inefficiently.” 

This is the message from the Institute of Race Relations (IRR), which today, Wednesday 7 February, begins a campaign against high taxes as well as the inefficient spending of taxpayer resources. 

The IRR’s Makone Maja says the cost of living in South Africa is reaching crisis levels. “More and more people are unable to afford basic necessities. People urgently need relief.”

Maja says that cutting VAT from 15% to 11,5%, reducing the fuel levy, and ending preferential procurement were among the relief measures the IRR would be proposing to finance minister Enoch Godongwana and other senior government officials and politicians.

Maja says by focusing on overcoming inefficient spending of taxpayer resources, taxes could be reduced without affecting service delivery and welfare transfers.

"The South African government is simply too big and bloated to work efficiently. Over the past twenty years the government had grown more than the overall South African economy. Between 2002 and 2020 every time a business expanded by R1 an equivalently sized part of the government expanded by R1,61. This shows how government activity is crowding out other more productive economic activities.”

Furthermore, a bloated and inefficient government was hampering economic growth, says Maja, with growth being one of the few ways South Africa could escape its current economic malaise.

“Taxes can be cut without hampering the provision of much-needed services. The government must act now to put more money back in the pockets of South Africans, who can be counted on to spend it more productively and efficiently than the government ever could,” she concluded.

Read more about the campaign here.

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